It was in 1997 that Reed Hastings and Marc Randolph created Netflix in Los Gatos, a small town in California. They came up with the idea of renting and selling DVDs by mail as they saw a great future in DVDs. The official launch was on the 14th of April 1998 with 30 employees and 925 DVDs available through pay-per-rent. Blockbuster, Netflix’s biggest rival, offered to buy the company for 50 million dollars in 2000, but Randolph refused the offer. After recently introducing the monthly subscriptions, Randolph saw great prospect in the company. The company initiated an initial public offering in 2002, selling 5.5 million shares of common stock at the price of 15$. This was a very important moment as it led to Netflix’s first fiscal year profit in 2003, making 6.5 million dollars on 272 million$ revenue.
From there, Netflix never stopped expanding, even though Marc Randolph retired from the company in 2004. In 2005, Netflix were shipping out a huge amount of 1 million DVDs per day, from 35 000 different choices. It was only in 2007 that Netflix started changing its original business, by introducing video on demand by internet. This is a turning point in the company’s history, as it benefited from the internet’s expansion to become one of the biggest companies in the world. It was in 2011, when the company stopped renting DVDs by mail, that the company exploded. It completely outclassed their rivals, Blockbuster, who had to shut down their whole company. Ever since, millions of people tune in everyday to Netflix to watch series or movies that can be translated into different languages. Netflix has even made their own series (Stranger Things, House of Cards…) and movies (Naked…) which are famously known worldwide. These are the “Netflix Originals”, and have allowed Netflix to establish themselves as dominant in today’s entertainment world. With the small amount of 3,500 employees, Netflix still manages to make over 187 million$ (2016), and proves that investing in a new technology can be very profitable in the long term.
Netflix is used by people of all ages, and presents a variety of movies for all tastes. This is very convenient as movies and series can be watched alone or with other people. I myself watch movies with my family, or with my friends, depending on the moment and the movies that I want to watch. Netflix presents a huge variety of pieces of entertainment for a small price of 8$ per month, which is why it is so popular worldwide.
By investing in a new technology (the internet), Netflix went from a small company to a worldwide entertainment megaplayer in the space of 20 years, and does not intend to stop expanding.
-By Arthur B.
The Tower Times Blog 